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Kathleen Bury, Contax project manager, provides an insight into Saudi Aramco’s major refinery upgrade project at Ras Tanura with Australia’s WorleyParsons
GCC Context
Despite the current economic climate, the planned GCC energy Capex landscape for 2009 to 2011 continues to show promise with c.US$409bn worth of investments on the table. The dominant sectors continue to include the refining and petrochemical sectors, with c.US$98bn and c.US$78bn respectively already planned for award by the end of 2011.
Saudi Arabia continues to support a project Capex position of c.40% worth of the investment planned within the GCC energy space by 2011.
Contax’s recent analysis of the ‘Impact of the Financial Situation on GCC Energy Project Workload’ indicates that the project postponement trend seen during 2007 and the early 2008 looks set to continue into 2009 with a considerable amount of award and execution schedule slippages. Nevertheless, given the GCC’s commitment to solidifying its global ‘petrochemical and refining hub’ position and developing its downstream presence, it is anticipated that a number of key projects will be realised in the long run.
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Background and Strategic Importance
The existing Ras Tanura refinery, situated on the East Coast of Saudi Arabia is considered to be one of the largest refineries globally. With a 550 000 bpd output capacity, it currently produces around 40% of Saudi Arabia’s local demand for fuel, primarily gasoline, kerosene, diesel and fuel oil. In an effort to help satisfy future local demand for refined products within the power, industrial and energy sectors and to supply feedstock to the nearby planned Ras Tanura Integrated Petrochemical project by a Saudi Aramco/Dow Chemical JV, Saudi Aramco is planning to expand the refinery by 400 000 bpd.
With an estimated investment cost of US$8bn and the utilisation of crude oil feedstock as an alternative to natural gas feedstock for petrochemical production as a result of Dow Chemical’s Deep Catalytic Converter (DCC) technology, the facility will look to process a mixture of Arabian Heavy, Arabian Medium and Arabian Light crude oil.
The refinery was initially designed to process only Arabian Heavy crude oil.
There have been considerable delays with the Ras Tanura Integrated Petrochemical project (RTIP), resulting from there being a number of outstanding issues that have yet to be resolved.
This has prevented the project from moving fully into the FEED stage, and it is understood that Saudi Aramco has decided to defer the RTREP project until the RTIP project is fully underway. Development of the RTREP project enables stakeholders to satisfy a number of key strategic objectives:
• Significantly increase Saudi Arabia’s contribution to local refining capacity through the conversion of its abundant heavy crude oil reserves into refined oil products
• Produces feedstock for the High Olefins Fluid Catalytic Cracker (HOFCC) within the Ras Tanura Integrated Petrochemical Project
• Enables Saudi Arabia to further promote the liquid feedstock option, take advantage of its access to raw materials and proximity to emerging Asian markets and develop a competitive advantage over its European and American petrochemical counterparts
• Enables Saudi Arabia to take advantage of the current price disadvantage on their Arabian heavy crude and reduce future imports
• Maximise the existing value of Saudi Aramco’s production activities and capitalise on synergies with international players to create new petrochemical value chains and thus encourage the growth of the downstream industries as well as reduce investment and operating costs
• Enable the creation of employment opportunities within Saudi Arabia thus helping Saudi Arabia achieve one of its key aims, unemployment rate reduction.
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